When YouTube was first launched in 2005, nobody could have known that it would become the giant that it is today.
What started out as a small company has quickly taken over the world, and it has become an institution of its own.
Not only does YouTube actively employ people to work for the company, YouTube is also responsible for a whole new group of celebrities, also known as YouTubers.
YouTubers are people who actively make money through creating videos for people to view on YouTube.
YouTubers were one of the first types of social media influencers, and now many YouTubers use multiple platforms to create content and make a living. But do YouTubers have to pay taxes?
In this guide, we’ll be taking a look at exactly what a YouTuber is, whether they need to pay taxes, and lots more. So, if you want to find out more about YouTubers and their finances, keep on reading!
What Is A YouTuber?
First things first, let’s take a look at exactly what a YouTuber is.
As we have mentioned, a YouTuber is an individual who creates content that is published on YouTube. Anybody can create videos on YouTube, and a lot of people do this as a pastime, without making any money on the content that they are publishing.
However, there are quite a few “celebrities” who have created an entire career through creating videos for YouTube.
It is possible to make a career on YouTube if you have a large following. For creators that generate a lot of traffic to the platform, YouTube will monetize videos.
This essentially means that these creators get a payment from YouTube for the videos that they create.
A number of content creators who have previously worked for BuzzFeed have been able to create independent careers using the YouTube monetization policy.
One of the most famous examples of this is the Try Guys who were perhaps BuzzFeed’s most famous content creators.
The Try Guys left BuzzFeed in 2018, and set up their own independent content creation company which they used to make money through YouTube ever since.
It isn’t just monetization that allows people to create careers on YouTube. Once you create a following on this platform, it is possible to make money through ad deals and merchandise sales.
Lots of people have been able to make a lot of money through YouTube.
This includes Jake Paul who has a net worth of $60 million at the time of writing, and is estimated to make around $20 million each year, predominantly through YouTube videos.
Now that we have established what a YouTuber is, let’s take a look at if these people have to pay taxes.
Do YouTubers Pay Taxes?
If you are thinking about starting up a YouTube channel with the intention of making money through it, you probably want to know if you have to pay taxes on this income. Let’s take a look.
In one word, yes, YouTubers do have to pay taxes. If you are earning an income through creating content for this platform, then you have to declare that money in order to pay your taxes.
Failure to pay tax on your YouTube income could result in you being charged with tax evasion. So, if you are thinking of starting a career as a YouTuber, it is incredibly important that you pay your taxes.
Individuals who are actively employed by YouTube will have a certain portion of their taxes deducted from their income. But, there is a big difference between being employed by YouTube and being a YouTuber.
If you are a YouTuber, you are essentially self-employed. So, any income that you make through YouTube Ad Revenue, brand deals, and affiliate marketing will have to have taxes paid on it.
It is your responsibility to ensure that you complete the necessary forms to pay tax on this money as part of your annual taxes. If you are unsure how to do this, you should seek the advice of a tax professional or financial advisor.
How Much Tax Do YouTubers Pay?
Everybody knows that paying your taxes can be very confusing. Doing this is confusing if you are actively employed by a company, let alone if you are self employed. So, how much tax do YouTubers pay? Let’s take a look.
If you are a YouTuber, you will not be taxed more heavily than if you have a regular job. However, as being a YouTuber is considered the same as being self-employed, you will need to pay the same level of tax as all self-employed individuals.
Currently, self-employed individuals are required to pay their taxes at a rate of 24% on all income generated from their self-employed profession.
So, if you earn money through affiliate marketing, brand deals, and YouTube ad revenue, as a YouTuber, you will pay 24% tax on all this income.
Can You Be a YouTuber Alongside Your Regular Job?
While some people are able to have an entire career through YouTube, many people actually do this as a part-time profession. So, let’s take a look at if you can be a YouTuber alongside your regular job, and what this means for your taxes.
Yes, you can be a YouTuber alongside your regular job. In fact, this is how a lot of people who make money through YouTube actually work.
It is difficult to create an entire career on YouTube, and even when you are making money, it is a big jump to give up the security of a job with a salary.
If you decide to set up a YouTube channel alongside your regular job, you will simply have to file taxes as a self-employed person alongside the taxes for your job. It really is that simple.
In short, yes, YouTubers do pay taxes. People who make money through creating content for YouTube are considered to be self-employed, so they will pay self-employed tax rates on their income. Failure to do this could result in criminal charges.